Canadian Life & Health Insurance Facts - 2019 Edition - CLHIA
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Canadian Life & Health Insurance Facts 2019 Edition
Ca n a d ian Life and H eal t h Ins u ranc e Fac t s , 2 01 9 Edit ion pres ent s aut hori ta ti ve ,
factu a l i nformat ion about l ife and healt h ins uranc e in C anada.
It is p u bli s hed by t he C anadi an Life and H ealt h Ins uranc e As s oc iat ion (C L HI A).
Th e CL HI A is a vol unt ar y as s oc iat ion w hos e m em ber c om panies ac c ount f o r 99%
o f Ca n ada’s l ife and healt h i ns uranc e bus ines s . T he indus t r y provides a wi d e
r an g e of financial s ecurit y produc t s s uc h as life ins uranc e, annuit ies (incl u d i n g
RRSP s, RRIFs and pens ions ) and s upplem ent ar y healt h ins uranc e to alm o st
2 9 m illion C anadians . It al s o holds over $ 8 5 0 billion of as s et s in C anada a n d
e m p loys over 156,000 C anadi ans .
Th is e di t ion includes informat ion about t he life, healt h and annuit y bus in e ss
o f all federall y regis t ered and provinc ially inc orporat ed ins uranc e provide r s
in Can ada (includi ng t he heal t h bus ines s of proper t y and c as ualt y ins urer s),
u n less s t at ed ot her wi s e. The s ourc es of m at erial for t his public at ion inc l u d e
in fo r m at i on from t hes e i ns ura nc e providers as w ell as relevant dat a from
g ove r n ment agencies , regul ator y bodies , and ot her as s oc iat ions . T heir assi sta n c e
is ack n owl edged wi t h t hanks .
Wh e rever pos s i bl e, figures pres ent ed here relat e to t he C anadian life and h e a l th
in su r ance bus i nes s of companies of all nat ional origins . H ow ever, w here re l eva n t,
th e n u mbers rel at e only to t he w orldw ide bus ines s of C anadian c om panie s.
Toronto Ottawa Montréal
79 Wellington St. W. World Exchange Plaza 1001 de Maisonneuve Blvd. W.
Suite 2300 100 Queen Street, Suite 750 Suite 630
P.O. Box 99, TD South Tower Ottawa, Ontario K1P 1J9 Montréal, Québec H3A 3C8
Toronto, Ontario M5K 1G8 613-230-0031 514-845-9004
416-777-2221
$
In order to simplify the text, we use the letters K, M, B, and T to refer to thousands,
millions, billions and trillions, respectively.
Provincial and historical data are available in the appendices.
www. clhia. ca t w it t er.c om /c lhia fac ebook.c o m / c l h i a
2President’s message
C a n a d a’s life and healt h i ns urers provide c overage
to m ake life m ore affordabl e.
T h rou g h w o r k pl ace and indi vidual pl ans , our
me m b e r c o m p anies make a wide- ran ge of healt h
c are ser vice s affordabl e to t hos e wh o need t hem .
Li fe in su r an ce pol ici es free mi ll ions of fam ilies
f rom w o r r y. And wealt h management produc t s help
pe o p le p la n c onfident l y for ret irement .
Wh en Ca n a d ians buy t hes e product s, t hey aren’t
j ust tak in g o u t a poli cy. They are i nves t ing in t heir
ow n, o r th eir employees ’ financial s ec urit y. T hey are
a c cep tin g th a t li fe has ri s ks . And t hey are c hoos ing
to an sw e r th at uncer t aint y by par t nering w it h s om e
of th e m o st rel iabl e and ex perienced financ ial
i n stitu tio n s in t he worl d.
C a n a d a’s life and healt h i ns urers are divers e, inc luding regional healt h ins urers ,
no n -p ro fits, co- operat ives and frat ernals , as w ell as large c om panies w it h
i n t er n a tio n a l reach. Toget her, i n 201 8 t hes e ins urers :
• P rovid ed fi nanci al prot ect i on for 2 9 m illion C anadians , paying
o u t $ 9 8 b i l li on i n benefit s
• Wo r ke d h ard to meet our promises of c lient s ’ s at is fac t ion, w it h
o n ly o n e in 100,000 cl ai ms res ult ing in a c om plaint
• Co n tr ib u ted to C anada’s econom ic grow t h, m aking over $ 7 8 0
b illio n in long- t erm inves t ment s and providing over 1 5 6 , 000 j obs
• E xp o r ted C anadian s t rengt h to the w orld, offering prot ec t ion to
6 0 m illio n peopl e i n 20 count ri es
• We re a m o ng t he mos t s t abl e and s ec ure financ ial ins t it ut ions
in Can ad a, wi t h capit al res er ves 3 9 per c ent higher t han
wh at g overnment regulators ex pec t
C e l eb r atin g o ur 125t h year in 2019, the C LH I A is es pec ially proud of t he role
w e c o n tin u e to pl ay i n t he s ucces s of our indus t r y and t heir c lient s . We
s i n ce re ly h o p e t hi s dat a i mproves your unders t anding of our indus t r y and
i t s co n tr ib u tio ns to financial s ecurity in C anada and around t he globe.
S t e p h en Fr an k
P r esi d ent & C EO
12
What’s inside
Industry profile
06 In d u s tr y at a glance
08 Th e Canadian life & health
i n su rance marketplace
Lines of business
12 Li fe ins urance
14 Re ti rement s olutions
16 He al t h ins urance
Industry in detail
20 Ho w ins urers inves t
22 Th e i ndus tr y ’s tax contributions
23 In te r national operations
Appendices (available on-line)
00 Prov incial data
00 Hi storical data
00 CLHI A member companies
00 Gl o ssar y of ins urance terms
00 Prev ious Factbook s
3$ 4
Industry profile
5Industry at a glance
Canada’s life and health insurers …
Provide
financial
protection for Focus
29 million on consumer
Canadians and pay satisfaction, with
out $98 billion in only 1 in 100,000
benefits claims resulting in
a complaint
Contribute
to economic
growth, making over
$780 billion in long-
term investments in
Canada and providing
over 156,000 jobs
6Are a source of
financial security and
stability with capital
reserves 39% higher
than governments
require
Bring Canadian
strength to the world,
offering protection to
60 million people in
20 countries
$
7The Canadian life & health insurance marketplace
Canada’s life and health insurers provide
financial protection for 29 million Canadians
Insurers provide life insurance, extended
health coverage and retirement solutions
through group and individual plans. In 2018,
life and health insurers paid out $98 billion
in benefits while working to provide a high
degree of customer satisfaction. There are more than
160 life and health
insurers operating in
Canada providing a
competitive Canadian
Coverage Benefits marketplace
Life
22 million $
13.2B
Canadians own
$4.8 trillion in life
• $7.7 billion paid as death
benefits
Over 90%
of benefit payments went to
insurance coverage • $5.5 billion paid to living
policyholders as disability living policyholders
benefits, cash surrenders or
dividends
Health
26 million $
36.1B
Canadians have $11.7 billion for prescription
supplementary drugs, which accounts for Benefits paid
health insurance over 35% of Canada’s total out have
spending on prescription increased
drugs over 50%
from a
Retirement decade ago
8 million $
48.7B
Canadians’ Annuity payments on
retirement savings employer-sponsored and
are managed by individual products increased
the industry by 76% over the past decade
8Notes
Life and health insurers collected * Including premium
revenues of $3.2 billion
$117 billion in premium revenues from foreign branches
operating in Canada
Total premiums in Canada rose to $117 billion in 2018.* Consumer complaints
Year-over-year growth was led by health insurance, up Visit www.olhi.ca
7.8 per cent; followed by annuities (including segregated Consumer protection
funds), up 4 per cent; and life insurance, up 3.8 per cent. Visit www.assuris.ca
120B
$
$
100B 19%
Life
19%
18% Health
$
80B
18% 19%
19% Annuities
$
60B Segregated
40% funds
39% 39%
$
40B 39% 40%
38%
$
20B
43% 43% 41% 43% 42% 41%
2008 2010 2012 2014 2016 2018
Insurers are
focused on
customer
satisfaction
Insurers process
hundreds of millions
of claims annually, and
only about one in every
100,000 claims result in
a complaint.
9$ 10
Lines of business
11Life insurance
Life insurance provides families with
financial security
Canadians buy life insurance primarily to provide financial
protection for their families in the event of death. Benefits
from a life insurance policy are used to replace income for
families, pay a mortgage or other debts of the deceased, or
contribute to an estate.
22 million
Canadians own
$
4.8 trillion
in life insurance coverage
The average life insurance
protection per household
in Canada is
$
423,000
That’s up from $417,000
in 2017, approximating
five times household
income.
5x
Protection & age
breakdown
Life insurance coverage closely
reflects age, income levels, marital
status, desired level of income to
support dependents, outstanding
mortgages, etc.
BC
$
447 AB NL Average protection per
42 $ $
542
SK $
346 insured household
37 $
457
MB 47 ($ thousands)
37 $
441 ON QC
37 $
440 Median age
$
347
41 43
NB PE NS
12 $
354 $
386 $
335
46 44 45Notes
Eighty per cent of life insurance Term insurance
provides cost-effective,
premiums are paid to purchase temporary coverage over
an insured’s younger years.
individual policies Premiums typically increase
over time in 5, 10 or 20 year
“steps”. Term insurance
How Canadians purchase Most life insurance policies are usually provides a right
life insurance polices purchased by individuals through to convert to permanent
an agent or advisor. A relatively insurance with the same
insurer without further
smaller amount is purchased as underwriting, providing
part of a group policy through an consumers with the ability to
employer or as members of an adjust coverage features to
address long-term needs.
22.2B
$ association.
Permanent insurance
2018 life meets life-long protection
insurance needs. In addition to death
premiums Individual: 80% protection, cash values are
accumulated and can be used
Group: 20%
for financial emergencies,
or to supplement retirement
income. Premiums can be
paid over a set number of
years or for life.
Individual life insurance Whole life insurance
in-force has grown faster than is the traditional form of
permanent insurance where
group in the past decade, the insurer takes on both the
accounting for 62% of the total, risk related to death and the
up from 55% in 2008. This is underlying investment risk.
mostly driven by growth in Universal life insurance
individual term life insurance. is a flexible form of
permanent life insurance
where consumers
select investment
5T
$
options and the
insurer assumes
13% the risk related
13% to death.
$
4T 13% 11%
14% 11%
14% 11%
11%
$
3T 14% 11%
12%
38%
$
2T 33% 35% 36%
29% 31%
Individual universal life
$
1T Individual whole life
Individual term
45% 44% 42% 41% 40% 38%
Group term
2008 2010 2012 2014 2016 2018
13Retirement solutions
Life and health insurers manage retirement
savings for over 8 million Canadians
Over 85 per cent of small businesses that provide Sources of annuity
pensions, RRSPs, TFSAs, RRIFs to employees contributions
offer these through life and health insurers.
Benefits of owning annuities
Annuities aren’t like other retirement
48B
income products. Here’s what they offer
that’s different:
$
2018 annuity
contributions
$
Lifetime income Maturity
benefits guarantees Pension plans
Solutions for
pension plan RRSPs & TFSAs
de-risking RRIFs
Non-registered savings
Growing assets to support retirees
Growth in retirement assets held by insurers over the past decade has been driven mostly
by accumulation annuities - up an average of 7 per cent annually since 2008.
450B
$
400B
79%
$
13%
13%
$
350B 8%
14% 7% of assets are in the
$
300B accumulation stage
7%
16% – up from 74% a
24%
$
250B 16%
28%
decade ago
7%
7%
$
200B 29%
18%
8% 31%
$
150B 33%
32% Individual payout
$
100B Group payout
$
50B Individual accumulation
42% 44% 46% 50% 52% 55%
Group accumulation
14 2008 2010 2012 2014 2016 2018Notes
Insurers paid out $48.7 billion in Lifetime income
benefits
retirement benefits in 2018 A feature of annuities that
manages the risk of outliving
savings.
Since 2008,
benefits have increased Maturity guarantees
at an average rate of
6%
An annuity feature to manage
$
50B risk of volatile investment
returns.
per year $
40B Pension plan de-risking
Employers may transfer
the investment and survival
risks associated with defined
$
30B benefit plan members to
$ insurers who specialize in
managing these risks.
$
20B Accumulation annuities
A flexible and secure
investment vehicle for pension
plans, RRSPs, TFSAs and non-
$
10B registered funds during the
savings stage.
Pay-out annuities
This type of annuity can
2008 2010 2012 2014 2016 2018 provide guaranteed income
for life, just like a DB pension.
Only life insurers can
Insurers manage $321 billion of guarantee income for life.
Canada’s pension funds *According to Statistics
Canada Pension Satellite
Canada’s total pension assets reached $3.8 trillion at the end of Account, 2017. Data excludes
unfunded liabilities for public
2017. This includes $694 billion in assets held by about 15,400 private Old Age Security of about
employer-based plans which provide retirement protection for about $1.6 trillion.
3 million Canadians.*
$
694B 1,233B
$
Private Personal (RRSPs,
$
1,912B
(employer- TFSAs, etc)
based) Public pensions
(CPP/QPP + government
employees)
$172 billion is
managed by life $149 billion is
insurers managed by life
insurers 15Health insurance
Insurers protect nearly 70 per cent of Canadians
against the costs of extended health care
In 2018, insurers covered $26.9 billion Benefits by coverage type
in extended health care costs, including
the costs of prescription drugs, dental
procedures and added hospital costs.
Canada’s life and health insurers also
covered costs of disability claims and other
insurable services. These benefits cover
$
36.1B
2018 health
expenses beyond those covered by public benefits
health plans.
Extended health Disability Accident & other
26M Canadians
covered 12M Canadians
covered 20M Canadians
covered
$
26.9B in benefits $
7.8B in benefits $
1.4B in benefits
Extended health breakdown
$
11.7B $
8.5B $
3.9B 1.9B
$ $
0.9B
Drugs Dental Paramedical* Hospital Travel
& vision
33 % 40%
Specialty drugs 24%
$
In 2018, specialty drugs, such as drugs for
rare diseases, accounted for 2 per cent of the
total number of prescription drug claims, but
made up 33 per cent of the costs - this cost is
anticipated to reach 40 per cent by 2023.** 2013 2018 2023
16Notes
Extended health
Ninety per cent of premiums are Reimburses a variety
of expenses, such as
paid to purchase group plans prescription drugs, dental,
hospital and medical
expenses, not covered by
provincial government plans.
How health insurance Canadians access health insurance
is purchased in two ways, through group plans Disability
provided by employers, unions or Helps replace lost income
due to disability (frequently
professional associations, and
integrated with Public
individual plans that are purchased by Pension Plans, Workers’
individual consumers. Compensation and
$
46.3B Employment Insurance),
usually paying around two-
2018 health Individual: 10%
premiums thirds of earnings.
Group: 90%
Accident & other
Includes coverage for
accidental death and
dismemberment, long-term
care and critical illness.
80% of working Canadians and * Paramedical
Refers to services and
their families are protected professions, such as
by private health insurance physiotherapy, that
plans, up from 73 per cent supplement and support
medical treatment
a decade ago.
** Source
Drug Trend Report, Express
Scripts Canada
Cost-effective health protection
Insurers put almost 90 per cent of health premiums to
work, providing benefits to policy holders.
(5-year average)
7%
87%
3%
operating
costs
paid out to
taxes policy holders as
benefits
3%
profits
17$ 18
Industry in detail
19How insurers invest
Insurers are a significant source
of long-term investments
$
780B
of stable industry
investment is driving
economic growth and
90% of insurers’ assets are held
in long-term investments
innovation across
Canada. What the The long-term nature
industry earns from
these investments of insurers’ liabilities is
helps reduce the
cost of insurance for
especially well suited to
Canadians. financing infrastructure
investments
insurance
cost
Insurers’ investments support the
economy and governments
$46B
Infrastructure
$ 110B
Provincial & municipal
$ 26B
Federal government
investments government bonds bonds
20Notes
Segregated fund
How insurers invest to cover future investments
claims and contribute to Canada’s primarily support annuity
contracts, where the
economic growth investment risk is retained by
policyholders.
General fund
General funds investments
Segregated funds have have grown at include amounts for other
grown at an annual 5.5 per cent policyholder benefits
annually since (expected future contractual
average rate of 8.7 per claims), other liabilities and
cent - its share of total 2008 required capital.
assets has increased
from 31 per cent to 38 * Measured as available
per cent over the past capital as a per cent of
decade regulatory capital required
300B
$
to cover risks. In 2018, OSFI
and Quebec’s AMF changed
how they calculate capital
$
250B ratios resulting in a one-time
reduction of the ratio.
$
200B Segregated fund
General fund
$
150B
$
100B
$
50B
Bonds Stocks Mutual Mortgage Real Cash Other
funds loans estate & other
investments
Insurers are strong and stable
2018
Life and health insurers maintain very
strong capital reserves, enough to cover
Capital ratio* potential claims from policyholders, and
139% to meet the rigorous expectations of
government regulators.
Regulatory requirement Capital adequacy levels are maintained
100%
by retaining profits and by issuing equity
and debt in capital markets.
21Industry’s tax contributions
Canadian life and health insurers contributed
over $8 billion in taxes
In 2018, insurance companies’ contributions to Canada’s tax base included
$2.6 billion and $5.4 billion paid to the federal and provincial governments
respectively. Of this $4.3 billion was borne directly by insurers. A further
$3.7 billion was collected and paid as provincial sales taxes on life and
health insurance and as employees’ share of payroll taxes.
The industry’s 2018 total tax contribution to all levels of government
in Canada was nearly twice its share of Canada’s GDP.
6B
$
Federal
$
4.5B Provincial
$
3B
$
1.5B
Total tax Taxes borne Taxes collected
contribution
$
8B
Over half
$
1.6B of total tax
contributions
industry’s total insurance are premium-
premium based taxes*
tax contribution taxes
$
1.5B $
1.2B
$
3.7B
corporate retail sales tax
payroll and
income and
other taxes on premiums
capital taxes and payroll taxes
collected
22International operations Notes
Canadian life and health insurers are * the industry’s contribution
is especially high for health
trusted at home and around the globe insurance, accounting for over
50% of value-add generated.
See Piling On - How Provincial
Canada’s insurers provide coverage and services to 60 million people Taxation of Insurance Premiums
in 20 jurisdictions. In fact, three of Canada’s life and health insurers Costs Consumers, CD Howe
rank among the top 15 largest in the world. Institute.
169,000
20 people employed
60M
countries & outside of Canada
territories
people protected
outside of Canada
Canadian insurers’ foreign
assets continue to grow
Assets held by Canadian life and health insurers on behalf of
policyholders outside of Canada amounted to $898 billion at
the end of 2018, up 37 per cent from five years ago.
** Includes the Caribbean
and Latin American
Source of premiums countries
57.2% 12.2% 11.1% 9% 10.5%
Canada USA Asia Europe Other**
Revenue from premiums outside of North
America have more than doubled since 2013
$
60B
$
30B
2013 2014 2015 2016 2017 2018 23Notes 24
25
Toronto Ottawa Montréal
79 Wellington St. W. World Exchange Plaza 1001 de Maisonneuve Blvd. W.
Suite 2300 100 Queen Street, Suite 750 Suite 630
P.O. Box 99, TD South Tower Ottawa, Ontario K1P 1J9 Montréal, Québec H3A 3C8
Toronto, Ontario M5K 1G8 613-230-0031 514-845-9004
416-777-2221
w ww.c lhi a. ca t w it t er.c om /c lhia fac ebook.c om / c l h i a
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